Friday, 06 July 2018

6PR – Mornings with Jane Marwick



Subjects: GST, Joint Cyber Security Centre

JANE MARWICK: We'll also talk about the GST if you would like to, although by the lack of action on the phones I'm not sure that you want to. I don't know if that's good news or bad news for my next guest, who is the Attorney-General and of course a very well-known West Australian politician. Christian Porter, good morning and welcome.

ATTORNEY-GENERAL: Well, Jane, the GST, the sun's shining.


ATTORNEY-GENERAL: The clouds have…

JANE MARWICK: Look at that, look at that. Mother Nature was on your side.

ATTORNEY-GENERAL: And it is as we said yesterday and an observation that I made, it is an enduring resolution to this problem. But the issue has always been not just getting a fairer share for WA. I mean, that's been utterly critical to us, but explaining to each and every other state and everyone in those states that this was a problem holding back the entire nation, that you had to have an enduring resolution, something that didn't leave any other state worse off. In fact, all states are better off. But you fix this system that was creating these massive disincentives for states to grow their economy.

JANE MARWICK: Look, the critics, and you knew this would happen, the critics have come out today. In fact, Scott Morrison yesterday said to me, you know, 70 per cent of something's better than 100 per cent of nothing. So, he sought of acknowledged that it's not the perfect solution and knew that there would be people critical and saying that the reform doesn't go far enough. Shane Wright today has sort of put one piece of commentary that I've heard a fair bit, and that is - does this mean that in a few years states or territories could have their begging bowl out to get even more of the GST pot? Is that; that's a fair question, isn't it? Does it mean that every time someone's got a problem this is how it's resolved?

ATTORNEY-GENERAL: Well, I mean, this is the classic case of not letting the perfect be the enemy of the very, very good because, you know, I've worked on this for eight years. This is incredibly difficult and I think the reason why my good old law school mate and now state treasurer, Ben Wyatt, accepts that this is a really good outcome...

JANE MARWICK: He seems pretty happy.

ATTORNEY-GENERAL: …well, because it's about the art of achievable and what's been achieved is something that is fantastic for WA. It works for every other state and it fixes a fundamental problem in the formula that saw a resource boom skew the formula in a way that created disincentives for other states to grow their economy or engage in tax reform, or indeed themselves try and grow their resources economy. So, you know, the critics will come up with three different tweaks that they would have preferred or that they thought could have been better. But seriously, they have not been inside the tent for eight years trying to have an enduring solution that will stick with all the other states.

JANE MARWICK: What about the idea, you know, of where this money is going to come from. That's what they're also saying. I mean, what if you don't get that growth?

ATTORNEY-GENERAL: You know, one of the things that the federal Labor Party have a huge problem putting their minds around is this concept; you can actually decrease tax, personal income tax and company tax and grow revenue. You know what, Jane, that is what is happening right here and now in Australia. And here's the theory that all modern economy economists have subscribed to for 70 years; if you give tax decreases to businesses, small, medium and large,  they reinvest the kept earnings in their business; they grow their business; they employ people; they grow their revenue. More tax comes in. More people are off the welfare queues and into work paying more tax. I mean, when I Social Services Minister, with Alan Tudge as Human Services, we moved 140,000 people off the welfare queues into work, and we were able to do that because of reforms inside our portfolio, but because we were growing the economy. We created 410,000 jobs last year. So you can decrease tax, company tax and personal income tax and grow revenue, and it's the revenue growth that allows you to build the hospitals and fix things like the GST. The reason you could never do this under the previous Labor government, is they weren't able to grow the economy in the same way we are.

JANE MARWICK: Just before we move off this - payroll tax. We keep hearing it from businesses. Payroll tax really is a tax on employment, isn't it? Do you wish that there was a way that you could get the states to…is there a way?

ATTORNEY-GENERAL: Well, as I say, Ben Wyatt is an old friend of mine and person I admire and a man of great intellect. And he now is a treasurer with an extra $4.7 billion dollars to spend over time and he has to make a decision about whether he pays off debt, whether he provides tax relief. And I would have thought that one thing that he will be giving serious consideration to is whether or not you actually use this to further boost the economy by decreasing payroll tax.

JANE MARWICK: Wouldn't that be great? And then to see…I'm on the side of business on this one….to see businesses hiring more people. With our unemployment rate so high here in WA, it's a bit of a no-brainer, isn't it?

ATTORNEY-GENERAL: Well, I think so, and it's the same theory that we are working on at the federal level. We have decreased tax for all businesses with a turnover from zero to $50 million. That's not profit, that's turnover. You know, a $40 million turnover might be a small profit…..

JANE MARWICK: Let's just go down that path for a minute. I do think that Bill Shorten took us all from mugs when he tried to sell turnover as profit. I think he thought when he talked about rich people, $10 to $50 million…people aren't mugs. People understand that the difference between turnover and profit. When you talk about...

ATTORNEY-GENERAL: Give us a break.

JANE MARWICK: Yeah, I thought that was a mistake.

ATTORNEY-GENERAL: I mean, you go out, if you talked to a company with a $40 million turnover in a low-profit margin business, they might be earning profit of $750,000. Now, if you can decrease their tax liability, and they've got an extra $200,000 to spend, what they spend it on is growing their business and employing more people. And you can do the same with payroll tax here in WA. So, that's obviously a question for Ben, as state treasurer, but he now has this fabulous opportunity to reinvest some of this money in a way that grows the economy.

JANE MARWICK: How worried were you and your federal Liberal counterparts about going to an election without some kind of a GST fix on the table? Were you worried that West Australian voters were going to punish you at the ballot box?

ATTORNEY-GENERAL: Well, I left state politics because I made this decision when I was state treasurer. This had to be fixed and I wasn't going to fix it from state parliament. And in state parliament, even as a state premier, you can complain, and this isn't a criticism of complaint, you have to complain. You've a right to complain.

JANE MARWICK: Well of course, McGowan and Barnett complained. Yeah.

ATTORNEY-GENERAL: Sure, and you have to do that. But in the literally hundreds of meetings with colleagues, with cabinet colleagues, with Treasury officials, with the Productivity Commission, where you're convincing people of the urgency and necessity to change the formula, when you're bringing people from other states along who aren't inclined to necessarily agree with you at first instance, you know what, in all those meetings there weren't state premiers from WA.


ATTORNEY-GENERAL: There was me, there was Cormann, there was Cash, there was Keenan; there were my state backbench colleagues with their backbench colleagues from interstate, and it was the most grinding process. I mean, I likened it to Nick Butterly, as that tree stump in the cowboy film 'Shane'. Every day after the day to day job that we all had as attorney-general, or as finance minister, we'd get out the axe and chip away at this damn thing and you do get there eventually. And one of the journalists put to us in the press conference yesterday; well, aren't you upset that you didn't do this 18 months ago or two years ago?

JANE MARWICK: Yes, I've heard that argument. Yeah.

ATTORNEY-GENERAL: Well I just said to him, mate, that seriously is like flying a journalist on the top of Everest, sort of waiting for Edmund Hillary to get there and then shoving the microphone in his face and saying: mate, aren't you a bit annoyed you weren't here five minutes earlier? It has been a massive mountain of climb, but we're there. We've got a resolution that helps the state, which helps the nation, which leaves every state better off, which can be paid for by the fact that we're actually growing the economy and growing revenue. No one loses.

JANE MARWICK: Is Shane right when he says that this is sort of a gentlemen's agreement? This, it's an intergovernmental agreement. Is that the correct term?

ATTORNEY-GENERAL: Well, an IGA is a gentleman and gentlewoman agreement…

JANE MARWICK: Yeah, I was going to say. I was going to try and use gender neutral but there it is.

ATTORNEY-GENERAL: What Scott said…

JANE MARWICK: I'm allowed to get away with that because I'm a girl.

ATTORNEY-GENERAL: Yeah, excellent. What Scott Morrison has said is that he does have the ability with a formula change of this type to direct that. But what he wants to do is have all the states agree on…to the new formula and to the floor and that would require, of course, once the IGA's entered into that you couldn't breach that formula and floor system without the agreement of the states..

JANE MARWICK: Without everyone agreeing ….so it's more than a handshake, it's more than…

ATTORNEY-GENERAL: Well I mean, all agreements are in a sense handshakes and all IGAs are handshakes, but they're the most important handshakes that exist in the Australian Federal financial relationship and no one breaches IGAs.

JANE MARWICK: Yeah, okay. When you walked in, I had the newspaper open at the crew at Moora College. Everyone knows how I feel about it. I'm right behind this school, and what do you make of that when you saw they've said: hey, you know, can we have some of that money? The headline: Moora activists wants the tax windfall to keep the residential college open. You had a comment when you saw that open.

ATTORNEY-GENERAL: Well I mean people in my electorate used that school. The school should stay open. I think that is one of the worst decisions of a weak minister, and this happens. And I've been in and about these decision-making scenarios where you have savings targets put on you and your department gives you ideas of things that can save money, and so someone in the department has put up with the State Education Minister: close down Moora…..

JANE MARWICK: Peter Collier said he got the same list.

ATTORNEY-GENERAL: Everyone gets it every year, right? It's the Washington Monument. This goes back to a famous thing in America, whether the Parks and Gardens Department was required to find a savings and they literally told the relevant American decision maker they should close down the Washington Monument. And you know what, you don't save any real money doing this. You've heard a lot of people on the ground and a hard minister who is into their work and knows their brief goes in and finds the real ways to save money by finding efficiencies, not closing down a school that services people in our rural communities. This is a shocker and it should be reversed.

JANE MARWICK: I feel for the kids. I went up and I hosted the first rally up there and I met the kids and that's where it got to me. Everyone knows how I feel about rural education and school of the air. And I, my feeling is, you're the politician here, Christian Porter, my feeling is it's because we used the terminology backflip. We use it on Bill Shorten too. I'm not mad keen for that terminology. I think if you admit a mistake and you come out and say: I got it wrong. The problem for the Education Minister Sue Ellery is there were a couple for her, and this would be seen as a third mistake or reversal. And that politically, it's seen as weak. But I think it's a strength, and I congratulate Bill Shorten on coming back and changing his mind about those- about the tax….

ATTORNEY-GENERAL: Seriously Nostradamus got it right more than Sue Ellery. Like, she's made some shockers. And when you make shockers, reverse them. This is just a terrible decision. You've got the kids- I got, in my electorate, so I've got Northam, York, Beverley and you know, all those rural kids, they've got a right to an education the same as every other kid that lives in Wembley Downs or any other suburban part of WA and Perth. And closing this school saves bugger all, really. I mean, it saves nothing and it punishes people and it's just the worst decision this Government's made. It should be reversed.

JANE MARWICK: Right. Let's get on to cyber security. That's what you're here for. Your comments will be music to the people of Moore, I can tell you that. Cyber security, you're here for an announcement and look, cyber security….Geoff Parry and Lisa Barnes we're talking about this today. It's pretty hard for people to get their heads around. Are we significantly exposed here, what could be the ramifications if we're not, could we be vulnerable to nation-state attacks, what would that look like? You're here to launch the Perth Joint Cyber Security Centre. Tell us about that.

ATTORNEY-GENERAL: So we are exposed, but I guess every modern western democracy is exposed, and the job is trying to make yourself less exposed and make yourself a harder target. So the way I'd describe it to your listeners is that they would appreciate that there are certain core government agencies; the AFP and the Australian Signals Directorate, who are very hard targets. I mean, they maintain fantastic security with respect to information and their cyber and IT networks. But then you think, as you go out in concentric circles, a water utility or an energy generator, right?

JANE MARWICK: Yeah. Electricity, yeah.

ATTORNEY-GENERAL: So these things become, what we have found through research, soft and softer targets the further you go from the core of government security agencies. But that doesn't mean that they're not really important agencies in operation. So they could be hacked, they could be basically shut down. They could have sensitive information stolen. What we've done is we've invested $47 million in what are known as Joint Cyber Security Centres. That places experts from government, from the Australian Signals Directorate and the Cyber Security Centre, which is inside Home Affairs, into a range of locations around Australia, and I'm opening one up in Perth just after this radio interview. And then what we do is we partner and have effectively co-location with companies, whose information, infrastructure and operations are really critical to the people of this state. So Bankwest is the leader here, but we've got Perth Airport, Wesfarmers, FMG. And these are organisations whose information, data, security, platforms and systems are really important to be protected and to be established as hard targets. And the centre is designed to do three things: to coordinate responses if something goes wrong, to detect problems and to design systems to protect us in the future to make sure that we're hard targets.

JANE MARWICK: Okay, so who's doing the protecting?

ATTORNEY-GENERAL: Well it's a joint, it's a joint and collaborative protective regime. So we send in experts from the Australian Signals Directorate, the Cyber Security Centre and they work with the companies who we are trying to protect with their experts. And the whole point here is that the lines between core government security agencies and important information and systems and platforms that exist in the private sector that have to be protected as well gets a bit blurry. So we've got to do it on a cooperative basis.

JANE MARWICK: We are out of time. Thank you for joining us this morning, Christian Porter.